Panera, Buffalo Wild: Earnings to Watch

(Updated with additional information and quote from Panera chairman.)

NEW YORK ( TheStreet) -- Restaurant stocks were mostly lower Wednesday following the latest round of earnings announcement from Panera Bread ( PNRA), Buffalo Wild Wings ( BWLD), Brinker International ( EAT), P.F. Chang's China Bistro ( PFCB) and Kona Grill ( KONA).
Panera Bread

Panera posted third-quarter earnings of $23 million, or 75 cents per share, in line with expectations, but top-line sales of $372 million came in just shy of analysts' consensus call for revenue of $373 million. Quarterly profits jumped 21.1% year-over-year.

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Still, the sandwich and salad purveyor was optimistic. Panera raised its earnings guidance for the current quarter, saying it now expects to earn between $1.15 and $1.17 per share in the fourth quarter. That's as much as a nickel past Wall Street's expectations for fourth-quarter earnings of $1.13 per share.

"We're coming right through this recession as strong as ever," Executive Chairman Ronald M. Shaich told TheStreet.

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Panera reported that system-wide same-store sales, or sales at stores open at least one year -- a closely watched metric in the restaurant industry -- grew 6.9% in the recent quarter. The comps data included a 5.5% increase at company-owned stores and a 7.9% increase at franchise-operated locations.

For fiscal 2011 Panera expects sales to grow between 4% and 6%, partly due to "modest price increases of approximately 1.5% during fiscal 2011 to cover inflation."

Panera maintained its forecast for fourth-quarter comps to grow between 4% and 6% year-over-year, and 7% to 8% growth for 2010. Quarterly comps expectations assume a 1% to 3% increase in sales and average check growth of 3%. The 2010 target assumes transaction growth between 1.5% and 2.0% and average check growth of 5.5% to 6.0%.

Comps were up 4.9% so far in the current quarter, the company reported, including 4.4% at company-owned stores and 5.4% at franchised locations.  

Quarter-to-date same-store sales data provided "increased confidence in our +5.0% and +5.0% projections, respectively, despite more difficult comparisons in the last quarter of the year," Piper Jaffray analysts noted.

The equity research firm maintained its overweight rating on Panera shares and increased its price target on the stock to $103, from $97.

Panera's operating margins, which improved by 20 basis points in the third quarter, should improve by another 25 to 75 basis points in the fourth quarter and 100 to 150 basis points for 2010, the company said.

"We remain encouraged by the company's SSS trends and believe the increasing operating margins and solid growth pipeline remain all the more impressive," noted Piper Jaffray.

Brinker International

Brinker beat bottom-line quarterly earnings expectations but revenue came up short . The operator of Chili's Grill & Bar and Maggiano's Little Italy restaurant brands said early Wednesday it earned $21.4 million, or 21 cents per share, in its fiscal first quarter of 2011.

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Results easily beat expectations for a profit of $14.7 million, or 15 cents per share, and were sharply higher than year-earlier earnings of $15.8 million, or 15 cents per share.

Brinker said quarterly revenue fell 6% to $654.9 millio, from $696.5 million in the year-earlier quarter, missing expectations for sales of $659.5 million.

Buffalo Wild Wings

Wing-and-beer purveyor Buffalo Wild beat profit expectations by 3 cents, posting earnings of 47 cents per share.

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Buffalo Wild's quarterly revenue grew 14% to $151.3 million, slightly better than expected revenue of $150.6 million.

Same-store sales grew 2.6% at company-owned restaurants and 0.3% at franchised restaurants, Buffalo Wild said.

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Despite the top- and bottom-line beat, the casual bar and dining chain's shares tanked more than 6% in after-hours activity Tuesday, likely because of its tepid forecast.

Buffalo Wild said "we believe we can achieve at least flat same-store sales at company-owned restaurants for the fourth quarter and 2010 net earnings of 20% growth for the year."

It offered a glimpse into current quarter results saying that for the first four weeks of the fourth quarter, same-store sales at company-owned locations are down 0.7% and down 1.7% at franchised locations.

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P.F. Chang's China Bistro

The Chinese food chain's earnings soared 69.4% in the recent quarter to $10.5 million, or 45 cents per share, thank to higher revenue and lower expenses. Still, investors were disappointed that P.F. Chang's cut its 2010 earnings forecast.

Revenue jumped 6.2% to $308.4 million, beating analysts' consensus call for sales of $307.6 million.

The operator of China Bistro and Pei Wei restaurant brands cut its full year EPS forecast by a nickel and now expects to post earnings of $1.95 per share, citing expectations for lower operating margins. Analysts expect earnings to come in at $1.98 per share in 2010.

Kona Grill

Kona Grill posted a narrower-than-expected net loss of $400,000, or 5 cent loss per share. Results were slightly better than expectations for a loss of $540,000, or 6 cents per share.

Kona reported revenue of $21.6 million, just managing to top expectations for sales of $21.3 million.

The nano cap shares were unchanged in afterhours trading after closing up 6.1% during the day's session.

Panera shares tumbled 4.9%, Buffalo Wild 5.9%, Brinker 8.9%, P.F. Chang's 7.4% and Kona 13.8%.

-- Written by Miriam Marcus Reimer in New York.

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